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How Vehicle Depreciation Affects Dallas Car Title Loans And Resale Amount
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If you're planning to buy a new car, don't forget to analyze how fast it will depreciate, particularly if you have ever taken out Dallas car title loans or plan to resell the car in the future. It can be pretty surprising just how fast a car loses its value, and some models will depreciate faster than others.
When you buy a brand-new car, it will lose some value as soon as you drive it away because it is no longer new. Once it's a used car, even if it just has a few miles on the odometer, it will lose 11% of its value, on average.
After you've owned the car for three years with about 15,000 miles added per year, it will lose 42% of its value. After five years, most cars lose about 63% of their value. This is an important consideration if you plan to get Texas car title loans in the future.
If you try to get Texas car title loans once you pay off your car loan, you will only be allowed to borrow so much. If you bought a brand-new car for $20,000 and it loses 63% of its value over 5 years as you pay off your car loan, it will only be worth $7,400. Car title loans in Texas will not be for the full value of your vehicle, either, as is the case with any secured loan like a pawn loan because the lender must protect itself. This means you need to be realistic about what you want to borrow against your car.
Different models will also appreciate faster or slower based on demand and inventory available. Consumers Reports recently rated cars based on their depreciation over three years and found that many affordable cars hold their value better than high-priced luxury and sports models. All of the top 10 cars that hold their value best are Japanese or European, while the 10 that depreciate the fastest are domestic cars.
This means you will get more with car title loans in Texas if you purchased a more affordable vehicle than a luxury car. This is because many people look to cost rather than luxury while the economy recovers, and vehicles that weren't economical to begin with will not retain value, particularly larger and mid-sized cars. Baseline models also tend to hold value better over the long run.
Don't forget to consider the color of your car as well. Popular car colors are silver, white and black and, while lenders who provide Dallas car title loans may not take into account your car's color to determine its value, having a car in the right color can get you more money when you resell it later.
Finally, the way you treat your car will help or hurt its value. Maintain according to the manufacturer's recommended schedule and keep these receipts to prove you've maintained the car well. Keep the inside clean and repair minor dents as they happen to help your car retain its value and get you the most money if you ever turn to Dallas car title loans or need to sell the car later.
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